Ohio voters may decide limits on payday loans

Frustrated a lack of action by state lawmakers, advocates seeking limits on payday lending took the initial step on Wednesday toward asking Ohio voters to approve the reforms.

Leaders of the effort submitted petition language and signatures from about 2,000 Ohio voters to the Ohio attorney general’s office. Once certified by state officials, the group will need to collect 305,591 valid voter signatures by July 4 to qualify for the November 2018 ballot.

Related: Ohio voters may be asked to crack down on payday lenders

A decade ago, by a 2 to 1 margin, Ohio voters endorsed a payday lending law that capped annual interest rates and fees at 28 percent. But since then lenders have found ways to sidestep the limits. The result is that borrowers are now paying rates of up to 591 percent.

“It’s been a decade and Ohioans are fed up,” said the Rev. Carl Ruby of Central Christian Church in Springfield. Ruby and Nate Coffman of Ohio CDC, two leaders in the effort, acknowledge that collecting enough signatures will be a heavy lift that will require volunteers and paid staff, significant fund raising and a savvy campaign.

“We are up against power and we’re up against an industry that has a lot of money to spend,” Ruby said. “But we have the moral argument.”

The proposed constitutional amendment mirrors reforms included in House Bill 123, sponsored by state Rep. Kyle Koehler, R-Springfield. Both call for a 28 percent APR cap and limit monthly fees at $20. The ballot issue would also extend payback time for loans to up to 180 days.

House Bill 123 was introduced on March 9, 2017.

Related: Bill to limit payday lending practices stalls in Ohio House

Ohio Consumer Lenders Association opposes House Bill 123, saying government shouldn’t restrict the private-sector lending options.

Typically with payday loans, consumers borrow $100 to about $1,500 and must pay it back within 30 days, either through a post-dated check or automatic withdrawal. They pay interest and fees that can boost the annual percentage rate above 400 percent. Often, borrowers can’t make the full payment when it comes due, so they extend the loan, accruing more interest and fees.

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